Affiliate marketing can be a bewildering world for affiliates trying to get to grips with things. We love a bit of abbreviation or technical jargon. There are rumours we’ve taken it waaay too far but we just don’t know how to stop. So here’s my basic guide to those must know bits of affiliate terminology.
Anything missing? Drop me a comment.
An individual who drives traffic (clicks) to websites. When a sale, lead, or other agreed action takes place, the affiliate will earn a commission. Affiliates drive traffic in many different ways but the most common methods are via website or blog content, paid traffic from search engines, e-mail, and social media. (See also: associate, publisher)
Fraudulent activity by an affiliate designed to generate underserved revenue. This can include using automated scripts to falsely create leads or clicks, or humans to do the same.
See also: Tracking Link
An affiliate network provides a third party service to merchants and affiliates. The network will provide tracking, reporting and payment fulfilment services and allows merchants access to a large pool of affiliates. Networks generate performance based revenue by charging the merchant an override on top of affiliate commissions.
An affiliate programme is a performance based form of marketing products or services offered by a website. The merchant pays a commission or lead rate on sales, enquiries or other actions to affiliate partners.
Graphic advertisement displayed on an affiliate site. (See Also Creatives)
A web user clicks on an affiliates banner or link and is directed to the merchant’s site.
(See also affiliate Fraud)
Click Through Rate / Ratio. Click through rate is calculated by dividing the number of clicks an ad receives by number of impressions. Thus if a banner ad was shown 100 times and received 20 clicks it would have a click through rate of 20%.
Most affiliate networks offer a facility to create user generated tracking links containing a “click reference”. This generally involves their being an allocated section within the tracking URL allowing affiliates to insert their own unique identifiers. These identifiers are then carried over into network reporting allowing affiliates to keep tabs on what’s generating sales for them.
Cost Per Action. Metric for payment of commission based on a recordable action,.
Cost Per Click. If you’re a PPC affiliate, you’d be subtracting your CPC from your EPC to see how much money you’re making. Hint: If your CPC is lower then that’s bad.
Cost per thousand impressions. There used to be some affiliate programmes paying on a CPM basis. *wipes tears from eyes* Sigh. The good ol’ days, eh?
Conversion Rate (or ratio). This is obtained by number of click throughs to merchant divided by number of sales generated.
Banner ads and content units provided to affiliates for promotional use on their sites.
This is the best word in the world. Refers to an affiliates payment for sales generated by their traffic based on percentage of sales or a fixed lead payment basis.
In the case of affiliate tracking cookies, this is a small file placed on a user’s pc as they travel through the affiliate link . A cookie allows sales generated by affiliate traffic to be recorded out of session (i.e. if the web user subsequently returns to the site and does not use the affiliate link). Cookies are usually valid for a set period of time. Most commonly around 30 days, during which time the affiliate will still earn commission on any purchases made by the customer they originally referred. Cookies can also be set by merchants to specify if commissions would be payable on a repeat basis within the cookie period (recurring commissions).
See also: Session Cookie.
This could be a blog post on it’s own. Briefly though, with increasing privacy concerns, and some technology providers actively bypassing advertising cookies – affiliate networds have many clever ways of tracking sales without being entirely reliant upon cookies.
Cross Device Tracking
Where a user might visit a site on one device and makes their purchase on another. Those clever networks do not like to let precious revenue escape them. I wholeheartedly approve of this. They’ve therefore used what is most easily described as witchcraft to be able to identify as many of these sales as possible without breaking any privacy laws.
Process of placing affiliate links to appropriate products within related text or articles on a website.
Conversion Rate (CR)
Percentage of clicks that convert to a sale. I.e. 4 sales for every 100 visitors would constitute a 4% conversion rate. Sales are referred to as conversions.
A data feed is a file (usually in CSV or XML format) containing product information for a merchant. This file will typically contain url’s, names, images & descriptions of products offered by the merchant. These files are manipulated by affiliates to create relevant commercial content for their own sites.
A link that is pointed to a specific page / product on a website. Most networks allow you to manipulate their base tracking link to let you send a tracked click to whichever part of the merchant site you deem necessary.
EPC / EPHC
Earnings per click / hundred clicks. A commonly used metric for determing the financial return provided by an affiliate programme. It refers to the average earnings of affiliates for every click / hundred clicks they deliver to merchant. Many affiliate networks make this data available to affiliates, but it tends to be calculated in a slightly different way by each network.
A world of EU privacy related pain for which you must take responsibility when running a website. For the most part, this requires a well thought out cookie disclaimer covering what sort of personal information (if any) your site collects, alongside the availability of information about how your site users can opt out.
Google programme offering web site owners the opportunity to include ads from its pay per click advertisers. Site owners are paid a percentage of the click cost to advertiser when one of these ads are clicked.
Is the pay per click advertising solution offered by the Google search engine. Advertisers pay a cost per click which is relative to the type of site content, and how much other advertisers are willing to pay.
The number of times a banner ad or web site page is requested from the server. (see also CTR)
Independent Affiliate Programme / In House Affiliate Programme
Where a merchant runs their own affiliate programme outside a network. Generally use an in-house tracking solution, or an off the shelf solution that can be integrated into their website.
ITP / ITP 2.0
Intelligent Tracking Prevention – A brainchild of Apple, affecting traffic via Safari. Good for privacy, problematic for affiliate tracking. Most networks have workarounds. As an affiliate, awareness of whether your merchant has implemented the required technology for the workaround to be effective is important.
Paid out for the life of a customer on a subscription service or other renewable product such as insurance. This means you get a revenue share for the lifetime of a customer you have referred to a merchant.
This is the charge applied by networks to merchants on top of your commission payments. Just as the merchant pays you commission for your sale, they pay the network a percentage on top for use of their platform.
Online retailer / business owner.
Pay Per Click. The practise of paying for traffic from search engine advertising services on a cost per click basis. Ads are served based on keywords or themes. (s
Is when a merchant removes sales commissions from an affiliate. This is usually due to returned goods, declined credit cards, or fraudulent activity. (see Also Chargeback)
What we all strive to be! These rare and dynamic affiliates generate huge amounts of revenue for the programmes they promote. Definitions differ, but if you’re in the top 5% of someone’s programme then you qualify. At least as far as they are concerned.
Search Engine Optimisation. The process of altering and refining a site to ensure better performance and positions in the search engines.
This is a cookie that only lasts as long as the browser window remains open. If the user closes the browser, or even in some cases, pops off to a different page to compare a price… PFFFT! It’s gone! Mentioned in this glossary because some affiliate programmes use them for tracking.
A payment made to a site in lieu of commission for a merchant or brand to be featured.
Commission structure offered by merchants which increases on a sliding scale based on performance. This can be based on number of sales or sales value.
A special link containing code which tracks web visitors sent to a site by an affiliate. Each affiliate link contains a unique id specific to an individual affiliate and will record sales, visitors, and impressions generated and allow the merchant to attribute commissions.
Two Tier Affiliate Programme
Programmes of this kind reward you for signing up sub affiliates. This means that you are paid a certain percentage of their earnings for the life of the affiliate.
Unique Visitor (UV)
This differs from the number of clicks in that it is a metric which refers to the number of unique individuals clicking on a link. For example, one person could click on a link 3 times in one day creating 3 visitor sessions and one unique visitor session.
White Label Solution / Site
Many merchants offer a facility where affiliates are provided with an unbranded version of their site via which to channel traffic.